The UK Government launched a consultation on 14 March 2024 on postponing the start of the Clean Heat Market Mechanism to 1 April 2025, and published its response to a separate consultation on the Boiler Upgrade Scheme1. The Heat Pump Association described the move as an addendum to the Government's consultation response on the mechanism, proposing a one-year delay to its introduction2.
The mechanism requires boiler manufacturers to sell a quota of heat pumps, starting with 4 for every 100 boilers they sell in the first year, rising to 6 for every 100 from 2025. Manufacturers that cannot meet the quotas can buy credits from companies selling heat pumps, or pay a fine of £3,000 per missing heat pump1.
In its Boiler Upgrade Scheme consultation response, the Government stated that the scheme, which provides grants of up to £7,500 to people in England and Wales to install low-carbon heating systems such as heat pumps, will remove the requirement to have no outstanding recommendations for loft and cavity wall insulation on a valid Energy Performance Certificate (EPC)1. Nesta said it had called for that change in its own consultation response1.
Charlotte Lee, chief executive of the Heat Pump Association, whose membership includes heat pump manufacturers which provide over 85% of the heat pumps in the UK, said2:
"Whilst this does not provide the certainty the industry desperately needs, it does provide an opportunity for the Government to deliver functioning processes in a transparent manner to enable the mechanism to work. This delay also provides the time for the Government to lay the required Statutory Instruments to introduce the policy."
Madeleine Gabriel, director of sustainable future at Nesta, said the removal of the insulation recommendation requirement meant even more homes would be eligible to use the grant to install a heat pump, but that the consultation on delaying the mechanism "sends the wrong signal to a key market for the future UK economy that needs stability to attract the right investment"1. Nesta also published a report on how policymakers could improve current and future subsidy schemes1.
| Item | Detail |
|---|---|
| Boiler Upgrade Scheme grant | Up to £7,500 in England and Wales1 |
| EPC insulation recommendation rule | To be removed1 |
| CHMM first-year quota | 4 heat pumps per 100 boilers sold1 |
| CHMM quota from 2025 | 6 heat pumps per 100 boilers sold1 |
| Fine per missing heat pump | £3,0001 |
| Proposed CHMM start date | 1 April 20251 |
Why it matters for households
The Boiler Upgrade Scheme change bears directly on who can apply for a grant towards a heat pump. Under the existing rule, a household with outstanding loft or cavity wall insulation recommendations on its EPC could be excluded; the Government has stated that requirement will be removed1. The grant itself remains up to £7,500 in England and Wales1. The wider policy framework, including targets and rules for heat pumps, is set out separately.
The mechanism works on manufacturers rather than households, but it shapes the market in which a household buys a heating system. Quotas and fines of £3,000 per missing heat pump create an incentive for manufacturers to sell more heat pumps, and the option to buy credits links boiler sellers to companies selling heat pumps1. A delay to the start date changes the timing of that pressure, not its direction.
The two bodies take different views on the delay. The Heat Pump Association said it does not provide the certainty the industry needs but gives time for processes and Statutory Instruments to be put in place2. Nesta said it could lead to uncertainty in a key market for the UK economy1.
What happens next
The consultation on moving the mechanism's start date to 1 April 2025 is open1. The Heat Pump Association said the delay provides time for the Government to lay the required Statutory Instruments to introduce the policy2. No date for a decision on the consultation has been reported.